Brazilian market of corn continues with high prices and risk of demand cuts


     Porto Alegre, October 13, 2020 – The Brazilian corn market reached the levels of BRL 55/60 a bag to growers in several places in Brazil last week, in some places even more. These are record prices in the middle of October. It cannot be said that this is due to the scarcity of corn because the numbers do not support this statement. Note that Paraná only exported 500,000 tons until September. In other words, it is not a question of a lack of corn in the local and national domestic market, and exports are not responsible for the price high. The continuity of the bullish feeling promoted by the media to influence growers seems to be the key point of the exaggerated retention in a picture that suggests internal scarcity. However, a more depreciated currency, high import costs, and good domestic demand highlight this firm price movement.

     The week was marked by new price records in the Brazilian corn market. In Rio Grande do Sul and Santa Catarina, prices reached BRL 70/bag. We must consider that these states do not have a second corn crop, therefore, they depend exclusively on their summer crop and purchases from other states. However, Paraguay has been struggling for large sales to these Brazilian states, due to logistics and also the low selling interest by local growers. The alternatives Paraná and Mato Grosso do Sul have few offers in cooperatives since growers have not made significant commitments, although over-the-counter prices are surpassing BRL 58.

     The Southeast region also copes with a critical picture. São Paulo is a fully importing state, without enough supply to meet all its demand. So, it depends on offers from Mato Grosso do Sul, Goiás, Minas Gerais, and sometimes Mato Grosso. Mato Grosso has strong supply difficulties to meet other states and registered deals during the week at BRL 55 to BRL 60 for withdrawal in November and December. So, unfeasible to São Paulo. Mato Grosso do Sul registered deals at BRL 60 over the week, at BRL 67/68 with freight plus ICMS to São Paulo, the same occurring with Goiás. Minas Gerais growers simply do not sell, with prices in Triangulo Mineiro reaching BRL 65 last week, which makes business for the neighboring state unfeasible.

     Agência SAFRAS Latam

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